Why the Govt is trying to stop Reliance from selling assets to Aramco

On August 12, RIL chairman Mukesh Ambani had announced the company’s plans to sell a 20% stake in its refining and petrochemicals business for $15 billion to Saudi Aramco.

But RIL may have to disclose its assets before it can freeze plans to do this.

On Friday, the Delhi high court ordered RIL and British Gas, BG Exploration and Production India Ltd (BG), a unit of Shell India, to disclose their assets after the Centre sought to restrain the companies from disposing them. 

Shares of Reliance Industries (RIL) declined as much as 2.77 per cent in early trade on the BSE on Monday after the government filed a petition in the Delhi High Court. At 09:49 a.m., the stock was trading over 2 per cent lower at Rs 1,566 apiece. In comparison, the S&P BSE Sensex was trading flat at 41,667 levels, down 15 points or 0.04 per cent.

In an application filed in September, the government has sought to prevent the two companies from honouring a $4.5 billion international arbitration award in a production-sharing dispute over the Panna-Mukta and Tapti fields, it said. 

The PMT fields were the first fields in India to be operated under a joint operatorship model. The Panna-Mukta fields, located off the Mumbai coast, have produced 211 million barrels of oil and 1.25 trillion cubic feet of natural gas since December 1994.

The PMT contract came to an end on Saturday.

The government, since 2010, has been fighting an arbitration with RIL and its partner, alleging that the companies appropriated huge sums of money in violation of the production sharing contracts in the PMT oil and gas fields. 
 

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